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Friday, May 8, 2009

Networks Tell Obama "STOP IT You're Killing Us !"

Its ironic that the industry that did it's best to elect Barack Obama to the presidency is now complaining that as President, he costing them too much revenue. But the Major networks are getting angry that President Obama keeps asking for so much time in the evening.

As you may imagine, Primetime TV draws the largest audiences and ad revenue. Every time the President preempts the normal evening viewing the networks lose that ad revenue. It is estimated that in the first four months of Obama's presidency the four major broadcast networks lost a total of $30 Million Dollars (and this during a recession).

The networks would really like to stop covering every presidential news conference live, but are afraid of presidential retribution:

But executives at the Big Four broadcast networks are seething behind the scenes that President Obama has cost them about $30 million in cumulative ad revenue this year with his three primetime news conference pre-emptions.

Now top network execs quietly are hoping that Fox's well-publicized rejection of the president's April 29 presser will serve as precedent for denying future White House requests for prime airtime.

"We will continue to make our decisions on White House requests on a case-by-case basis, but the Fox decision gives us cover to reject a request if we feel that there is no urgent breaking news that is going to be discussed," said one network exec, who, like all, would not speak for attribution fearing repercussions from the administration.

"If the president wants to make it tough for your network, he can," the exec added.

Another network executive confided, "Nobody wants to take on the White House, so we'll have to tiptoe through this."

Although Obama's post-election visits to NBC's "The Tonight Show With Jay Leno" and CBS' "60 Minutes" served as major ratings boosts, the love affair between the networks and the Democrat darling actually might be cooling: There are too many demands, and too much money is at stake.

Even more irksome, the White House is bailing out bankers, insurers and carmakers, but nary a nickel has gone to the struggling media industry.

The White House declined comment, but Kevin Sullivan, a former communications director for President George W. Bush, said he gets Obama's strategy.

"He couldn't reach that size audience at any other time of the day," said Sullivan, who once handled corporate communications at NBC Universal. "Even though the number of viewers declined a lot from the first to the third conference, 28 million people is still a massive audience to reach with a message."

Of course, this isn't the first time broadcasters and a president have been at odds. Ronald Reagan's attempts to script and control the media during his televised news conferences drew headlines in the '80s, particularly because he conducted more primetime events than any president before him.

But his successors, George H.W. Bush, Bill Clinton and George W. Bush, relied less on primetime addresses, choosing to hold them in the daytime, thus lessening the financial impact on the networks.

The Obama conferences have been disruptive to all network schedules. Fox was particularly upset because the president's second news conference in February forced it to bump ratings champ "American Idol." The network lost as much as $6 million in ad revenue on that night alone.

Like many businesses, broadcasters are having to cut costs and lay off staffers. Said another broadcast exec, "The millions of ad dollars the president is costing us could help us keep some of those people working."

The nets are wondering why the president can't hold conferences at earlier times in the night, either from 7-8 or during the evening news telecasts.

Under the terms of the deals between broadcast networks and media buyers, if a show in which dollars are allocated is either canceled or replaced for the night, ad buyers have the right to ask for cash back. Buyers often choose to reallocate those dollars, but it can be difficult to plant ads in the same or comparable shows.

"Advertisers would always rather run in the shows where they were originally scheduled," said Ed Gentner, senior vp national broadcast at media agency MediaVest. "If they can't, they'll usually look for make-goods first. It's easier for the larger advertisers with more units to reallocate to get make-goods to reach their target audiences than for smaller advertisers who may only have a few units in specific shows."

Gentner believes the Obama problem is tougher for the networks than clients because while advertisers can get make-goods in future shows, the inventory in the pre-empted show is lost for good.

"The loss of inventory means a loss in revenue," said Jackie Kulesza, senior vp broadcast activation director at Starcom USA. "And in this economy, there's that much more pressure to deliver on sales."

Fox refused to pre-empt its Tim Roth drama "Lie to Me" on April 29 because the network doesn't have a news division or a nightly newscast, though it does have sister cable news channels Fox News and Fox Business.

Fox did make the news conference feed available to its broadcast station affiliates, but only three stations -- in Miami, Milwaukee and St. Louis -- chose to carry it live.

"Because most of our audience doesn't watch us for news on a regular basis, we are not going to get the viewership the other networks get anyway," said one Fox exec who declined to be named. "Once it became apparent that there was no national emergency tied to this press conference, we felt that we should air entertainment for our regular viewers and leave the press conference coverage to Fox News Channel and Fox Business Channel."

As for the two chief Hispanic broadcasters, NBC Universal-owned Telemundo aired the first two Obama primetime news conferences live but put the most recent on tape delay outside of primetime at 11 p.m. Univision aired all three conferences live.

Given the networks' reticence in airing their complaints publicly, it remains to be seen just how aggressively they'll push back when the White House makes its next request.

Complicating matters, ABC, CBS and NBC all have news divisions and nightly national newscasts as well as primetime and Sunday morning newsmagazines. The president has proven that a personal appearance on one of those shows can bring in sizable ratings hikes.

"Nobody's happy about these press conference pre-emptions, but nobody but Fox is going to get that aggressive with the White House," one industry observer said. "Some of the commentators on Fox News Channel are already at odds with the White House, so it doesn't matter as much to them."

The White House might be noticing who's doing what: Fox was one of the major news organizations not called to ask a question by the president at his April 29 news conference.

Conversely, the president singled out a Univision reporter at his February presser, and two nights later, Obama delivered a personal message in English and Spanish on Univision's awards show "Premio io Nuestro." Before the Mexico trip, he gave Univision an exclusive interview from the White House.

Although network execs applaud the president's zeal for keeping the people informed, they also feel that there are other ways he can deliver his messages, particularly if they don't involve a national crisis.

"This is not like 1965, when there were only three broadcast networks," one exec said. "There are countless ways to reach viewers today -- on several hundred cable networks and online with sites like You Tube and the White House's own Web site."

The networks also want to make sure the president is not using them to sell his own political agenda.

"President (George W.) Bush did it once toward the end of his administration, holding a primetime news conference to push privatization of social security, and we weren't happy about that," one network exec said.

The dispute might be resolved by having the network news heads sit down with Obama officials, but the system doesn't work that way.

The White House issues its requests for pre-emptions to the news divisions, but the news units don't run primetime -- entertainment divisions do. So internal meetings must be held at each network, with news and entertainment offering input to the top execs, who then decide.

Perhaps the more potent weapon for broadcasters in this skirmish will be the apparent tiring of the viewing public for these live marathon primetime conferences. Already this year, ratings are off 42% from the first to third.

That seems to have emboldened broadcasters to stand up to the White House a bit more.

"We reluctantly went along with his latest request," one network executive said, "but the next one better involve something really important to the American people, or the networks are going to tell the White House to buzz off."